Facebook Inc (NASDAQ:FB) entered a definitive agreement to purchase Oculus VR, a virtual reality technology company for approximately $2 billion as the social network seeks new growth opportunities in the future.

In a statement, Mark Zuckerberg, CEO of Facebook Inc (NASDAQ:FB) said, “Mobile is the platform of today, and now we’re also getting ready for the platforms of tomorrow. Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate.”

On the other hand, Brendan Iribe, co-founder and CEO of Oculus VR is excited to join the team of Facebook INc (NASDAQ:FB) and he believes that “virtual reality will be heavily defined by social experiences that connect people in magical, new ways.” He added that ; reality is  a “transformative and disruptive technology.”

Transaction details

Facebook Inc (NASDAQ:FB) agreed to pay $400 million in cash and 23.1 million shares of its common worth around $1.6 billion for Oculus VR. The total amount of the stock payment was based on the $69.35 per share average closing price of the equities of the social network giant during the 20 trading days before March 21.

In addition, Oculus VR will also receive additional $300 million earn-out in cash and stock based on the achievement of certain milestones.  The social network giant expect to complete the deal in the second quarter this year.

Oculus VR is the maker of Oculus Rift, a ski-goggles-like virtual reality headset used by people to play games. The company already gained strong interest among developers and received over 75,000 orders for Oculus Rift’s development kits.

Facebook Inc (NASDAQ:FB) intends to expand that existing advantage of Oculus in gaming to areas such as communications, entertainment, education, media etc.

Long-term bet

During a conference call, Zuckerberg emphasized that Facebook Inc (NASDAQ:FB) is making a long-term bet on its acquisition of Oculus VR, and he does not expect virtual reality company to be profitable. According to him, the social network giant is planning to generate profits from software and services or advertising.

Zuckerberg said, “We still have a lot of work to do on mobile but at this point we feel strong enough in our position that strategically we also want to start focusing on building the next major computing platform that will come after mobile.”

He added, “We’re making the long-term bet that immersive, virtual and augmented reality will become a part of people’s daily lives” Furthermore, Zuckerberg said Facebook Inc (NASDAQ:FB) take into account the possibility of developing its own virtual reality platform, but it does not have the technology or engineers to make it a reality. Zuckerberg aims to make the products “ubiquitous” and sell it to the market as soon as possible.